Early  Illinois 
I  aper  Money 


by 

R.  Edward  Davis 


R.  Edward  Davis 


Early  Illinois  Paper  Money 

By  R.  Edward  Davis 


Reprint  from  the  Numismatic  Scrapbook  Magazine  with  the 

addition  of  an  alphabetical  check  list  of  paper  currency 

issued  in  Illinois. 


Published  By 

HEWITT  BROTHERS 

CHICAGO 


The  First  Banks  of  Illinois 


A  JOURNEY  to  the  Illinois  coun- 
^  try,  in  the  far  west,  in  1818, 
was  usually  made  down  the  Ohio 
river.  The  river  followed  a  gener- 
ally westward  direction  along  the 
southern  border  of  Ohio  and  In- 
diana until  it  reached  Illinois.  Here 
it  turned  abruptly  south  to  pass 
around  the  Ozark  uplift  in  southern 
Illinois.  At  the  point  where  it  turn- 
ed south,  was  situated  the  village  of 
Shawneetown,  which  was  the  prin- 
ciple port  of  entry  to  Illinois.  Here 
emigrants  left  the  slowly  moving 
flat-boats  to  cross  over  to  the  settle- 
ments in  western  Illinois  and  Miss- 
ouri. Roads  also  lead  northward  to 
the  newly  established  settlements  in 
English  Prairie  fostered  by  Morris 
Eirkbeck  and  George  Flower.  A 
traveller  of  that  time  says  the  town 
"consisted  of  about  thirty  log  houses. 
The  chief  occupation  of  the  people 
is  the  salt-trade.  There  is  a  United 
States  Land-office,  and  a  log  bank  is 
just  established.  The  chief  cashier  of 
this  establishment  was  engaged  in 
cutting  logs  at  the  moment  of  my 
arrival."  This  was  the  metropolis  of 
Illinois  in  1818,  and  the  home  of  the 
first  bank  in  Illinois. 

The  founder  of  the  first  bank  in 
Illinois  was  John  Marshall,  who 
came  to  Shawneetown  in  1804.  He 
became  a  prosperous  merchant.  He 
took  deposits,  loaned  money  and  is- 
sued bills  of  credit.  In  1816  he,  in 
company  with  a  few  others,  applied 
to  the  Territorial  Legislature  for  a 
bank  charter.  The  law  establishing 
the  Bank  of  Illinois  at  Shawneetown 
was  approved  on  December  26,  1816. 

The  capital  stock  was  fixed  at 
$300,000,  divided  into  $100  shares, 
but  one  third  of  this  capital  was  to 
be  reserved  for  the  Territory  (or 
subsequently  the  state)  of  Illinois, 
should  the  legislature  wish  to  buy 
the  stock.  The  subscribers  were  re- 


quired to  pay  $10  per  share  in  gold 
or  silver  at  the  time  of  subscription, 
and  the  balance  in  current  paper 
money,  when  called  for  by  the  di- 
rectors. The  directors  could  not  call 
for  more  than  twenty-five  per  cent 
of  the  whole  amount  at  any  one  time, 
and  then  only  after  sixty  days  notice. 
Since  ready  money  was  so  scarce  in 
the  new  country,  the  charter  pro- 
vided that  the  bank  might  begin 
business  as  soon  as  $50,000  had  been 
subscribed  and  $10,000  paid  in. 

Twelve  directors  were  to  be  elect- 
ed, all  of  whom  must  be  residents  of 
Illinois.  The  bank  was  empowered 
to  acquire  property  to  the  extent  of 
$500,000,  but  such  property  should 
not  include  real  estate  in  excess  of 
what  was  needed  to  do  business, — 
except  that  which  it  had  acquired 
through  forfeiture  of  loans  or  on 
mortgages.  The  charter  also  provid- 
ed that  in  the  event  that  the  bank 
refused  to  redeem  its  notes  in  coin, 
the  holder  could  collect  12%  interest. 
The  life  of  the  charter  was  to  be 
twenty-five  years. 

The  mininum  capital  of  $10,000 
was  soon  paid  in  and  the  bank  open- 
ed for  business  on  January  1,  1817. 
The  fact  that  for  some  time  there 
was  no  mention  made  of  it  in  the 
legislature,  and  little  in  the  news- 
papers of  the  time,  seems  to  indi- 
cate that  it  carried  on  a  conserva- 
tive and  successful  business  as  mea- 
sured by  the  standards  of  the  time. 

Banking  standards  in  those  days 
were  quite  different  from  banking 
principles  of  today.  To  understand 
the  early  history  of  banking  in  Illi- 
nois these  facts  must  be  kept  in 
mind.  James  in  "The  Growth  of 
Chicago  Banking"  explains  this  dif- 
ference quite  clearly,  "Banks  were 
organized  not  because  there  was 
capital  seeking  investment;  not  be- 
cause the  places  where  they  were 


2003076 


established  had  commerce  or  manu- 
factures which  needed  their  foster- 
ing aid;  but  because  men  without 
active  capital  wanted  the  means  of 
obtaining  loans,  which  their  stand- 
ing in  the  community  would  not  com- 
mand from  banks  or  individuals 
having  real  capital  and  established 
credit.  In  frontier  communities  like 
Illinois  banks  were  regarded  agents 
for  the  painless  provision  of  capital. 
In  a  pioneer  community  capital  of 
all  kinds  was  scarce,  because  there 
was  seldom  much  surplus  product; 
of  moneyed  capital,  there  was  very 
little,  and  banks  were  looked  upon 
as  a  mechanism  for  increasing  the 
supply,  without  any  painful  saving 
on  the  part  of  the  community. 

"Checks  were  almost  unknown, 
outside  of  the  large  eastern  cities, 
and  few  people  except  the  wealthier 
merchants  were  familiar  with  bank 
accounts.  If  banks  were  to  supply 
the  community  with  either  currency 
or  capital  funds,  it  had  to  be  in  the 
form  of  bank  notes,  and  if  banks 
were  to  exercise  any  influence  upon 
the  general  level  of  prices,  it  would 
have  to  be  through  the  policies  that 
they  adopted  in  regard  to  the  issue 
and  retirement  of  such  notes." 

The  success  of  the  Bank  of  Illinois 
at  Shawneetown,  inspired  citizens  in 
the  settlements  near  the  Mississippi 
to  become  bank  conscious.  A  group 
of  people  of  Edwardsville  headed  by 
Ninian  Edwards  and  Benjamin  Step- 
henson  succeeded  in  obtaining  a 
charter  for  the  Bank  of  Edwards- 
ville from  the  legislature  on  Janu- 
ary 9,  1818.  The  provisions  of  the 
charter  were  similar  to  those  for 
the  Bank  of  Illinois,  except  that  the 
shares  were  for  $50  instead  of  $100. 
The  first  installment  of  the  capital 
amounting  to  $30,000  was  quickly 
paid  in.  Of  this  $22,625  came  from 
Kentucky,  $1,800  from  St.  Louis  and 
only  $5,475  from  Illinois.  No  resi- 
dent of  Illinois  paid  in  more  than 
$50.  Ninian  Edwards  was  a  powerful 


political  figure,  and  his  name  carried 
considerable  weight,  in  spite  of  the 
fact  that  he  was  deeply  involved  in 
land  speculations,  and  that  among 
his  associates  in  the  bank  were  sev- 
eral whose  financial  stability  and 
honesty  were  somewhat  questionable. 

The  bank  at  Edwardsville  began 
business  at  once.  Within  a  few 
months  a  serious  financial  crisis 
developed  which  spread  through  the 
south  and  the  west.  Both  Illinois 
banks,  after  some  anxious  days, 
weathered  the  storm  and  came 
through  the  depression  in  good  order. 
Early  in  1818,  through  the  political 
manuverings  of  Ninian  Edwards, 
both  banks  were  made  federal  de- 
positories for  money  received  from 
the  sale  of  public  land.  Up  to  this 
time  the  Bank  of  Missouri  at  St. 
Louis  had  been  the  federal  deposi- 
tary for  Illinois.  The  removal  of 
these  deposits  from  the  Bank  of 
Missouri  to  the  Illinois  banks  start- 
ed a  long  and  bitter  feud  between 
the  St.  Louis  banks  and  the  two 
Illinois  banks.  On  one  occasion  a 
representative  of  the  Bank  of  Miss- 
ouri appeared  in  Shawneetown  with 
$12,000  in  notes  of  the  Bank  of  Illi- 
nois and  demanded  payment  in 
specie.  Representatives  of  the  Bank 
of  Missouri  in  Kaskaskia  refused  to 
accept  Illinois  notes  in  payment  for 
land,  and  in  all  possible  ways  made 
trouble  for  the  Illinois  banks. 

At  first  the  two  Illinois  banks 
competed  with  each  other  as  fiercely 
as  they  both  competed  with  the  Bank 
of  Missouri.  Finally  they  joined 
forces  against  their  more  powerful 
rival,  and  agreed  that  neither  bank 
would  present  the  notes  of  the  other 
for  redemption,  if  it  could  possibly 
be  avoided,  and  in  addition  agreed 
to  send  notes  of  the  other  bank  as 
far  from  the  point  of  issue  as  pos- 
sible, in  order  to  make  their  redemp- 
tion more  difficult. 

The  financial  depression  of  1819 
had  called  attention  of  eastern 


bankers  of  the  loose  and  perilous 
conditions  in  eastern  banks.  This 
lead  to  a  curtailing  of  the  bank  note 
issues.  In  four  years  the  bank  note 
circulation  in  the  United  States  de- 
clined nearly  fifty  percent.  This  con- 
traction as  it  swept  west  caused 
bank  failure  after  bank  failure.  All 
lines  of  business  were  crippled. 
Through  all  of  this  depression  the 
Bank  of  Illinois  continued  to  operate 
efficiently  and  profitably.  In  1823 
the  business  of  the  bank  declined  so 
rapidly  that  the  directors  decided  to 
suspend  operations,  and  they  suc- 
ceeded in  doing  this  without  sur- 
rendering their  charter. 


The  Bank  of  Edwardsville  was 
not  so  efficiently  managed  and  was 
soon  in  trouble.  Early  in  1819, 
Ninian  Edwards,  became  dissatisfied 
with  the  way  things  were  going  and 
quietly  resigned  from  its  Board  of 
Directors.  Although  he  was  a  Sena- 
tor in  Washington  at  the  time,  he 
left  it  to  Stephenson,  the  president 
of  the  bank,  to  inform  the  Secretary 
of  the  Treasury  of  his  resignation 
and  to  ask  that  no  more  federal 
money  be  deposited,  until  the  con- 
dition of  the  bank  be  investigated. 
Stephenson  was  well  aware  of  the 
value  of  the  prestige  of  the  Ed- 
wards name,  and  also  of  the  condi- 


$20  Bank  of  Illinois  of  the  second  type;  lower  illustration — $10  of  the 
Bank  of  Cairo  issued  at  Kaskaskia. 

—7— 


tion  of  the  bank,  so  he  did  nothing. 
Early  in  the  fall  of  1821  the  failure 
of  the  Bank  of  Missouri  caused  a 
panic  at  Edwardsville.  There  was  a 
run  on  the  bank,  and  after  a  few 
days  it  closed  its  doors,  owing  near- 
ly $60,000,  of  which  about  $55,000 
was  owed  to  the  federal  government, 
the  proceeds  of  the  sale  of  public 
lands. 

The  same  legislature  which  issued 
the  charter  for  the  Bank  of  Ed- 
wardsville issued  charters  for  two 
other  banks,  the  Bank  of  Kaskaskia, 
and  the  Bank  of  Cairo.  The  promot- 
ers of  the  Bank  of  Kaskaskia  were 
not  very  energetic.  By  the  time  the 
stock  subscriptions  were  opened 
there  were  not  enough  people  with 


from  the  government  about  eighteen 
hundred  acres  of  land  on  the  narrow 
point  of  land  between  the  Ohio  and 
Mississippi  rivers.  This  land  deeded 
to  a  company  of  which  Comegys  was 
the  leading  spirit,  and  plans  were 
drawn  up  for  a  town,  a  bank  and  an 
ambitious  scheme  of  public  improve- 
ments. The  act  of  incorporation  pro- 
vided for  two  thousand  lots  which 
were  to  be  sold  for  $150  each.  One 
third  of  this  was  to  be  spent  for 
public  improvements,  one  third  was 
to  go  to  Comegys  and  his  associates, 
and  the  other  third  was  to  be  bank 
capital.  Comegys  died  suddenly  in 
the  spring  of  1819  and  the  whole 
scheme  collapsed. 

When  the  first  state  Constitution 


The  rare  $10  Bank  of  Edwardsville  note.  It  is  said  that  there  is  only  one 
complete  set  of  the  notes  of  this  bank  in  collectors  hands. 


ten  dollars  in  gold  or  silver  in  Kas- 
kaskia to  raise  the  required  capital 
so  the  bank  never  opened. 

The  most  interesting  of  all  the 
banking  schemes  was  the  organiza- 
tion of  "The  City  and  Bank  of 
Cairo."  The  act  authorizing  this 
scheme  was  also  passed  on  January 
9,  1818.  Five  months  earlier  John 
Comegys  of  Baltimore  had  bought 


was  adopted  on  August  26,  1819,  the 
Bank  of  Illinois  at  Shawneetown 
was  the  only  bank  in  the  state  in 
good  standing.  The  new  Constitution 
provided  that  there  should  be  no 
other  banks  or  moneyed  institutions 
in  Illinois  except  those  already  pro- 
vided by  law,  and  a  state  bank  with 
its  branches  to  be  established  by  the 
legislature.  The  account  of  the  ex- 


periences  of  the  State  in  the  banking 
business  is  another  story  and  will  be 
told  later. 

In  1835  during  a  wild  period  of 
land  speculation,  advantage  was 
taken  of  the  provision  in  the  Consti- 
tution, allowing  all  banks  in  exist- 
ance  to  continue,  to  extend  the 
charter  of  the  Bank  of  Illinois  at 
Shawneetown.  The  same  men  who 
had  managed  it  in  its  early  days 
were  again  in  charge.  Although  the 
Bank  of  Cairo  had  never  opened  for 
business  its  charter,  too.  was  re- 
newed. The  old  charter  had  been  sold 
to  a  group  of  Englishmen  who  open- 
ed the  bank  at  Kaskaskia.  This  bank 
was  operated  soundly  and  incon- 
spicously,  and  for  several  years  fur- 
nished about  70%  of  all  the  small 
notes  used  in  southern  Illinois.  In 
about  1841  the  bank's  officers  used 
a  considerable  portion  of  the  bank's 
funds  to  finance  a  canal  company. 
As  a  result  of  the  collapse  of  this 
scheme  the  bank  was  forced  into 
bankruptcy  in  February  of  1842. 

Following  the  disasterous  collapse 
of  the  Second  State  Bank,  the  Bank 
of  Illinois  at  Shawneetown  again 
found  itself  to  be  the  only  bank  in 
the  state.  Meanwhile,  brought  to  the 
front  by  the  activities  of  Andrew 
Jackson,  there  had  developed  a  feel- 
ing that  all  banks  were  evil.  The 
Bank  of  Illinois  had  been  forced  to 
buy  great  quantities  of  Illinois 
Public  Improvement  bonds,  and  had 
been  obliged  to  sell  to  the  state, 
some  bank  stock.  The  legislature 
wanted  to  clear  up  the  Public  Im- 
provement bonds  and  the  bank  offer- 
ed to  exchange  them  for  its  stock. 
The  state  administration  wanted  to 
close  the  bank,  which  had  a  right 
under  its  extended  charter  to  con- 
tinue operation  for  fifteen  years. 
Finally  the  legislature  repealed  the 
charter  and  placed  the  assets  in  the 
hands  of  three  Commissioners,  ap- 
pointed by  the  Governor,  who  were 


required  to  close  up  the  bank  as 
soon  as  possible. 

A  second  act  allowed  the  bank  to 
go  into  voluntary  liquidation  under 
its  own  officers,  provided  the  bank 
turned  over  to  the  state  its  state 
bonds  in  return  for  the  bank  stock 
held  by  the  state.  This  second  act 
was  accepted  by  the  bank.  Though 
the  bank  closed  its  doors  in  1842, 
its  notes  continued  to  circulate  for 
many  years,  so  great  was  the  faith 
of  the  people  in  John  Marshall  and 
the  other  officers  of  the  bank. 

The  notes  of  these  early  Illinois 
banks  are  scarce,  especially  those  of 
Edwardsville,  and  the  early  notes  of 
the  Bank  of  Illinois.  The  notes  of 
the  Bank  of  Cairo  at  Kaskaskia  are 
much  oftener  found.  A  list  of  the 
notes  of  these  banks  follows: 

Bank  of  Edwardsville —  25  cents, 
50  cents,  $1.00,  $2.00,  $3.00.  $5.00, 
$10.00,  and  a  "Post  Note"  where  the 
value  is  written  in,  usually  $20.00. 
These  notes  are  nicely  engraved  by 
Tanner,  Kearney  and  Tiebout. 

Bank  of  Illinois  at  Shawneetown 
— early  issue— $1.00,  $2.00,  $3.00 
and  $5.00.  On  these  notes  the  name 
is  spelled  "Shawance  Town". 

Later  issues— $1.,  $2.,  $3.,  $20., 
$50.,  and  $100.  The  $20.  notes  of  the 
later  issues  occur  in  two  types,  one 
of  which  was  issued  in  1838  and  the 
other  in  1839.  The  plates  for  the 
notes  of  the  last  issue  were  engrav- 
ed by  Wm.  Dane  &  Co. 

The  scarcity  of  the  early  notes  of 
the  Bank  of  Illinois  is  probably  due 
to  the  fact  that  when  the  bank  sus- 
pended operations  in  1823.  it  re- 
deemed and  destroyed  all  notes  pre- 
sented for  payment. 

The  Bank  of  Cairo  at  Kaskaskia — 
$1.00  (two  types),  $2.00,  $3.00  (two 
types),  $5.00  (two  types),  and  $10.00. 
The  plates  for  these  notes  were  en- 
graved by  Underwood,  Bold,  Spencer 
and  Huffy. 


The  State  Banks  of  Illinois  and  the  Era  of 
Internal  Improvements 


TLLINOIS  was  admitted  to  the 
1  Union  in  1818.  The  Constitution 
of  the  new  state  provided  that 
"there  shall  be  no  other  banks  or 
monied  institutions  in  this  state  than 
those  already  provided  by  law,  ex- 
cept a  State  bank  and  its  branches, 
which  may  be  established  and  regu- 
lated by  the  general  assembly  of 
the  state  as  they  may  think  proper." 
Two  banks  were  in  existance  in  Illi- 
nois at  this  time,  the  Bank  of  Illi- 
nois at  Shawneetown,  and  the  Bank 
of  Edwardsville.  There  were  two 
other  charters  which  had  been 
granted  by  the  legislature,  those  for 
the  Bank  of  Cairo,  and  the  Bank  of 
Kaskaskia,  but  which  had  not,  at 
this  time,  been  used. 

At  this  time  there  was  very  little 
gold  or  silver  in  circulation  in  the 
state.  The  circulation  was  mainly  in 
bank  notes  of  other  states.  These 
passed  at  all  kinds  of  discounts,  and 
at  constantly  varying  discounts.  A 
few  came  from  specie  paying  banks, 
some  from  banks  that  were  really 
solvent,  some  from  banks  that  had 
failed,  some  from  banks  that  had 
never  existed,  and  some  were  coun- 
terfeits of  the  issues  of  existing 
banks.  The  notes  of  the  Illinois 
banks  made  up  but  a  small  part  of 
the  circulation,  and  notes  of  the 
Bank  of  the  United  States  were  very 
rare.  This  mass  of  paper  came 
mainly  from  banks  in  Ohio  and  the 
South,  though  some  notes  from 
banks  in  Western  New  York,  Penn- 
sylvania and  the  District  of  Colum- 
bia, with  a  few  from  the  New  Eng- 
land states  were  also  circulating. 

This  was  a  period  of  wide  spread 
financial  depression.  Every  one  was 
in  debt.  During  the  boom  times, 
everyone  had  speculated  in  land  and 
usually  on  credit.  People  were  land- 


crazy.  Land  could  be  bought  from 
the  government  by  paying  only  a 
small  part  of  its  cost  as  a  first  in- 
stallment, and  many,  expecting  a 
rapid  rise  in  land  values,  took  out 
land  when  they  only  possessed 
enough  money  to  pay  the  first  in- 
stallment. The  wild  speculation  re- 
sulting from  such  sales  aroused  the 
apprehension  of  the  National  Gov- 
ernment, and  to  curb  such  excesses 
and  Act  was  passed  in  1820,  reduc- 
ing' the  price  of  public  lands  from 
$2.00  to  $1.25  an  acre  and  requiring 
full  payment  in  all  future  sales.  The 
effect  of  this  act  was  to  bring  the 
depression  to  the  West.  In  the  East 
attempts  had  been  made  to  control 
and  regulate  banks  of  issue  in  some 
states.  This  had  led  to  a  rapid  con- 
traction in  the  volume  of  bank  notes 
and  from  this  a  depression  had 
started.  In  this  time  of  financial 
stringency  the  United  States  Land 
Offices  were  more  careful  what  kind 
of  money  they  accepted  in  payment 
of  public  lands.  Money  of  any  kind 
was  not  plentiful  and  when  the  Land 
Offices  refused  to  accept  about  two 
thirds  of  that  in  circulation,  a  real 
depression  hit  the  state. 

As  a  measure  of  relief  the  first 
state  legislature  passed  an  act  to 
establish  a  state  bank.  It  was  to 
have  a  capital  of  $4,000,000,  half  of 
which  was  to  be  subscribed  by  the 
state  and  half  by  private  persons. 
The  charter  provided  that  the  bank 
might  start  business  when  it  had 
received  "in  gold  or  silver  or  notes 
of  banks  in  the  Western  country 
paying  specie"  an  initial  payment  of 
$15,000.  Even  with  the  most  liberal 
interpretation  of  the  last  clause,  it 
was  not  possible  to  find  enough 
people  who  were  able  or  willing  to 
subscribe  enough  cash  so  this  bank 


—10— 


never  came  into  existance  as  a  busi- 
ness institution. 

At  the  next  session  of  the  legis- 
lature in  1821,  a  new  bill  was  intro- 
duced creating  a  bank  based  entirely 
on  the  faith  and  credit  of  the  state. 
This  bank  would  not  have  to  worry 
about  stock  subscriptions.  Opposi- 
tion to  the  act  was  strong.  It  was 
pointed  out  that  the  bank  would 
have  no  specie  with  which  to  redeem 
its  notes,  also  that  the  act  was  a 
bare-faced  attempt  to  violate  the 
prohibition  in  the  national  constitu- 
tion of  bills  of  credit,  and  that  such 
an  institution  would  encourage  wild 
speculation  instead  of  tending  to 
curb  it.  The  bill  was  passed  in  both 
houses  by  a  small  majority. 

The  bill  came  before  the  council 
of  revision,  consisting  of  the  Gover- 
nor and  the  Justices  of  the  Supreme 
Court,  which  under  the  state  consti- 
tution, possessed  the  veto  power. 
This  council  gave  it  a  unanimous 
veto.  The  bill  went  back  to  the  legis- 
lature and  after  a  long  debate  it 
was  passed  with  a  few  votes  to 
spare. 

The  act  as  it  was  passed  provided 
for  The  State  Bank  of  Illinois,  with 
its  principal  office  in  Vandalia,  and 
with  branches  at  Shawneetown, 
Edwardsville,  Brownsville  and  Pal- 
myra. The  capital  was  finally  fixed 
at  $300,000,  all  subscribed  by  the 
state.  The  management  was  to  be  in 
the  hands  of  a  president,  a  cashier, 
and  six  directors,  with  five  local  di- 
rectors at  each  of  the  branches.  All 
of  these  officers  were  to  be  appoint- 
ted  by  the  legislature  every  two 
years.  The  directors  of  the  branch 
banks  were  to  select  their  own 
presidents  and  cashiers.  The  presi- 
dent of  the  Vandalia  Bank  was  given 
a  salary  of  $800  a  year  and  the 
cashiers  were  to  receive  salaries 
not  to  exceed  this  amount.  The  other 
officials  received  no  salaries  but 
were  given  the  right  to  borrow 


amounts  up  to  $1,000  at  two  percent 
interest. 

After  the  organization  was  com- 
pleted the  Vandalia  Bank  was  au- 
thorized to  have  printed  $300,000  in 
notes  in  denominations  of  from  $1 
to  $20  and  to  give  them  out  to  the 
branch  banks  in  proportion  to  the 
population  in  the  various  districts. 
These  notes,  guaranteed  by  the  State 
of  Illinois,  bore  two  percent  interest 
a  year  and  were  to  be  retired  in  ten 
years.  They  were  to  be  receivable 
for  all  taxes  and  dues  to  the  state, 
and  one  tenth  of  the  entire  issue  was 
to  be  retired  each  year. 

The  officers  of  the  various  branch 
banks  were  to  lend  this  money  at 
six  percent,  the  loans  to  be  secured 
by  real  estate  of  at  least  twice  the 
value  of  the  loan.  For  small  loans 
of  less  than  $100,  upon  the  consent 
of  the  board  of  directors,  personal 
property  could  be  pledged  as  secur- 
ity. No  one  could  borrow  more  than 
$1,000.  No  loan  was  for  more  than 
one  year,  but  if  the  debtor  would  re- 
duce the  loan  ten  percent  he  could 
get  a  renewal  for  another  year. 

It  is  quite  evident  that  the  aim  of 
the  bank  was  to  distribute  the  money 
among  as  many  borrowers  as  pos- 
sible. The  bank  was  also  to  act  as  a 
depositary  and  as  a  business  agent 
for  the  state.  It  was  also  authorized 
to  receive  deposits  and  do  a  general 
banking  business,  but  it  was  pro- 
hibited from  charging  depositors  for 
its  services,  and  its  exchanges  were 
to  be  made  at  par. 

In  the  hope  of  its  preponents  such 
was  to  be  the  first  State  Bank  of 
Illinois,  which  its  capital  had  been 
put  at  $800,000  no  such  sum  was 
ever  turned  over  to  the  bank.  It  did 
receive  from  the  legislature  $2,000 
in  cash  to  pay  for  the  engraving  of 
the  plates  from  which  the  notes 
were  to  be  printed.  To  insure  the 
widest  circulation  of  these  notes  in 
the  states,  the  legislature  passed 
additional  acts  to  prevent  the  issu- 


—11— 


Notes  of  the  Second  State  Bank.  Upper— One  dollar  on  Illinois  &  Michigan 
Canal  Fund;  Middle  and  Lower— $10  and  $5  with  "Branch  Bank"  imprint. 

—12— 


ance  of  any  form  of  paper  currency 
by  any  one  but  chartered  bankers. 

As  soon  as  the  bank  was  opened 
about  every  man  who  had  any  un- 
encumbered real  estate  had  borrow- 
ed all  he  could  get,  and  every  man 
who  could  get  an  endorser  had  bor- 
rowed his  hundred  dollars.  In  about 
a  week  the  whole  $300,000  had  been 
loaned.  Those  who  came  too  late  to 
get  a  loan  complained  bitterly  of 
political  favoritism  shown  by  the 
directors.  Since  most  of  the  direct- 
ors were  politicians  with  no  banking 
experience,  very  little  attention  was 
paid  to  the  probable  ability  of  the 
borrowers  to  repay  the  loan.  Many 
of  the  borrowers  accepted  the  loan 
as  a  gift  from  a  benificent  common- 
wealth and  never  expected  to  have 
to  repay. 

Briefly,  the  state  enjoyed  a  mild 
boom,  but  it  was  of  a  short  life.  The 
Eastern  banks  had  put  their  houses 
in  order,  and  business  conditions 
were  improving.  This  improvement 
did  not  reach  Illinois.  Here  a  paper 
currency  with  no  specie  backing, 
drove  gold  and  silver  and  the  notes 
of  specie  paying  Eastern  banks  out 
of  circulation.  The  State  Bank  notes 
which  were  intended  to  circulate  at 
par  with  gold  and  silver  were  down 
to  75  in  a  little  over  a  month  and  in 
less  than  two  years  were  worth  only 
thirty  cents  on  the  dollar.  Even  small 
change  disappeared  and  to  make 
change  it  was  necessary  to  tear 
these  notes  in  pieces  the  size  of 
which  roughly  indicated  their  value. 

While  the  act  creating  the  bank 
had  provided  that  one  tenth  of  the 
notes  issued  should  be  retired  each 
year,  the  legislature  made  no  pro- 
vision to  supply  any  specie  to  do  it. 
In  fact  specie  was  so  scarce  that 
when  one  of  the  branch  banks  re- 
ceived two  silver  dollars,  they  con- 
sidered them  so  rare  they  put  them 
on  display  as  a  curiosity. 

So  many  complaints  came  in  con- 
cerning the  management  of  the 


branches  that  in  1824  the  legislature 
appointed  a  committee  to  examine 
these  branches.  It  was  found  that 
the  books  were  in  such  a  condiiton 
that  it  was  impossible  to  find  out 
what  the  true  state  of  affairs  really 
was.  It  was  found  that  loans  had 
been  made  illegally,  and  several 
large  sums  could  not  be  accounted 
for  in  any  way.  At  once  steps  were 
taken  to  close  up  the  banks.  In  Jan- 
uary, 1825,  an  act  was  passed  order- 
ing the  cashier  to  burn  all  notes  in 
his  possession  in  a  bonfire  in  the 
public  square  at  Vandalia  in  the 
presence  of  the  Governor  and  the 
members  of  the  Supreme  Court. 

In  this  fire,  notes  with  a  face 
value  of  $75,000  were  destroyed. 
Other  fires  were  held  in  June  and 
December  of  the  same  year,  where 
about  $50,000  more  were  burned.  The 
bank  still  had  a  large  volume  of 
loans  outstanding  and  attempts  were 
made  to  collect  them.  Some  small 
parts  were  paid,  but  finally  the  Su- 
preme Court  following  a  precedent 
in  a  similar  case  in  the  United  States 
Supreme  Court,  declared  these  notes 
to  be  bills  of  credit  and  therefore 
illegal,  and  that  notes  issued  for 
them  could  not  be  collected  by  law. 

This  decision  did  not  relieve  the 
state  of  the  necessity  of  redeeming 
the  notes  in  full  in  1831.  There  were 
still  $150,000  of  these  in  circulation 
and  the  state  had  only  $30,000  in 
cash.  To  repay  these  notes,  the  Gov- 
ernor was  authorized  to  borrow 
$100,000.  A  contract  was  made  with 
Samuel  Wiggins  of  Cincinnati  for 
this  amount,  he  taking  state  stock, 
bearing  six  percent  interest  to  be  re- 
deemed whenever  the  State  Treasur- 
er had  any  surplus  funds  on  hand. 

In  a  year  nearly  $290,000  had  been 
redeemed  or  destroyed,  and  by  1835 
only  $6,554.00  of  the  notes  were  still 
outstanding,  representing  probably 
the  losses  and  destruction  during  the 
ten  years  of  the  life  of  the  bank. 
This  experiment  in  banking  cost  the 


—13— 


state  over  $300,000  in  cash  and  the 
losses  sustained  by  the  people  and 
business  in  general  cannot  be  esti- 
mated. With  the  closing  of  this  bank 
the  state  was  left  without  a  bank 
in  its  borders,  and  this  condition 
existed  for  several  years. 

Business  conditions  all  over  the 
country  improved  greatly  in  the 
early  '30's  and  it  was  not  long  be- 
fore the  boom  reached  the  West. 
With  this  improved  business  con- 
dition it  was  not  long  before  there 
came  demands  for  financial  institu- 
tions, able  to  provide  exchange  with 
the  East  and  with  New  Orleans.  The 
charters  of  the  Bank  of  Illinois  at 
Shawneetown,  and  the  Bank  of 
Cairo  were  revived,  and  a  movement 
was  set  afoot  to  establish  another 
state  bank.  The  Bank  of  the  United 
States  had  been  refused  a  renewal 
of  its  charter  by  Jackson's  adminis- 
tration, and  to  take  its  place  various 
state  banking  systems  had  been  es- 
tablished. Some  were  carefully 
managed,  and  some  were  very  care- 
lessly managed.  Floods  of  this  new 
paper  money  poured  into  the  state. 
Under  such  conditions  it  was  not 
hard  to  convince  the  legislature  that 
a  new  bank  was  needed  to  protect 
the  business  interests  of  the  state. 

The  bill  for  the  new  bank  was 
passed  by  the  legislature  and  ap- 
proved by  the  Committee  of  Revision 
February  12,  1835.  It  provided  that 
the  bank  should  run  until  I860,  its 
head  office  was  to  be  at  Springfield, 
and  eight  branches  were  to  be  estab- 
lished where,  in  the  opinion  of  the 
directors,  they  were  needed.  The 
capital  was  to  be  $1,500,000,  all  to 
be  subscribed  by  the  general  public, 
though  the  state  reserved  the  right 
to  take  $100,000,  if  the  legislature 
so  desired.  The  bank  could  begin 
business  when  $250,000  in  specie  had 
been  received. 

The  state  made  no  guarantee  of 
the  notes,  and  the  value  of  the  notes 
issued  was  not  at  anytime  to  exceed 


two  and  a  half  times  the  paid-in 
capital.  The  notes  were  to  be  re- 
deemed in  specie  at  anytime,  and  a 
failure  to  redeem  any  of  them  in  ten 
days  time  was  to  cause  the  charter 
to  be  forfeited,  and  the  bank  to  go 
out  of  business. 

Within  a  few  weeks  after  the  sub- 
scription lists  were  opened  $8,000,000 
was  subscribed,  and  the  task  of  cut- 
ting down  the  subscription  started. 
Meanwhile,  Samuel  Wiggins  of  Cin- 
cinnati, with  a  group  of  followers, 
succeeded  in  gaining  possession  of 
many  of  the  subscription  rights,  and 
when  the  stock  was  allotted,  Wig- 
gins controlled  nearly  3500  shares. 

In  July,  1835,  the  bank  opened  for 
business.  Branches  were  established 
in  Alton,  Belleville,  Chicago,  Dan- 
ville, Galena,  Jacksonville,  Mount 
Carmel,  Quincy  and  Vandalia.  On 
the  whole  the  operations  of  the  bank 
the  first  years  seemed  to  be  more 
than  satisfactory.  The  notes  circu- 
lated about  at  par  with  specie  and 
the  bank  made  money  on  its  regular 
banking  business. 

In  1836  there  began  a  period  of 
the  wildest  speculation  ever  seen  in 
America.  Townsites  were  laid  out 
everywhere  and  a  sudden  enthusiasm 
for  railroads  began.  Lines  were 
planned  to  criss-cross  the  state  in 
all  directions,  with  little  regard  to 
any  possible  business  they  might 
get.  The  move  to  build  the  Illinois 
and  Michigan  canal,  really  got  un- 
der way.  Business  was  so  good  that 
the  state  legislature  decided  to  sub- 
scribe $100,000  in  state  bank  stock 
as  provided  in  the  bank's  charter. 
The  bank  agreed  to  assume  the  old 
Wiggins  loan  left  over  from  the  first 
State  Bank,  as  a  consideration  for 
the  privilege  of  opening  some  new 
branches.  The  legislature  also  took 
advantage  of  a  provision  in  the  old 
charter  of  the  Shawneetown  Bank 
and  took  $100,000  stock  in  that  bank 
also. 

The  people  of  the  state  became  so 


—14— 


wild  about  public  improvements  that 
when  the  legislature  met  in  1836  it 
passed  a  most  amazing  act,  known 
as  the  "Public  Improvement  Bill".  It 
included  all  of  the  pet  schemes  of 
the  wildest  promoters.  It  provided 
for  the  construction  of  seven  rail- 
roads across  the  state  from  east  to 
west  and  for  the  central  railroad 
running  from  Galena  to  Cairo.  The 
old  National  Highway  from  Vincen- 
nes  to  St.  Louis  was  to  be  improved. 
The  state  was  to  borrow  $8,000,000 
at  once  and  begin  work  upon  all  of 
these  projects,  starting  from  every 


important  town  on  the  proposed 
rights  of  way.  A  Board  of  Fund 
Commissioners  consisting  of  three 
"experienced  financiers"  was  ap- 
pointed to  make  the  loan  and  to  ad- 
minister the  distribution  of  it  to  the 
various  projects. 

Eastern  capitalists  did  not  seem 
very  anxious  to  make  this  loan,  even 
though  it  was  made  an  unconditional 
obligation  of  the  state.  A  provision 
of  the  act  prohibited  the  sale  of  the 
securities  at  less  than  par.  The  state 
could  not  wait,  so  finally  the  State 
Bank  and  the  Shawneetown  Bank 


t    <K       Nn=        :«• 


STATE  BANK  OF  ILLINOIS 


/^/'fiflS  WW»H>»^/  '- 

•  /A^Jjy»»j|*-  .        \t"fYf\5 

" :%s  ltt/£) 


ST'ATB   BANK  AT 
t<n/s"fift<-r  tittti.  IKIII  to  llti  iirtln-  ,,f       .  .  :•    .     ' 
•;/ 'I/it-  llliiwi*  4-   Jliffiiifun    t'aimf.   2*tot>  DoUnvo, 

./«•/.<*,.«*.    /''  .'•  .'''•"  -/'-  /V, 


The  $100  note  of  the  Second  State  Bank,  which  is  of  larger  size  than  other 
issues.  The  $2  Chicago  branch  note  was  printed  from  type. 

—15— 


were  asked  to  make  the  loan.  Both 
were  making  money  and  at  the  time 
the  future  looked  rosy.  Nearly  three 
million  dollars  of  these  bonds  were 
unloaded  on  these  two  banks.  The 
Shawneetown  Bank  sold  part  of 
their  share  at  once  at  a  fair  profit, 
but  the  State  Banks  held  theirs  as 
capital,  against  which  more  notes 
were  issued. 

The  State  Bank  stock  was  earning 
nearly  eight  percent  and  times 
seemed  so  good  that  the  legislature 
increased  the  capitalization  of  the 
State  Bank  to  $4,500,000  and  of  the 
Shawneetown  Bank  to  $1,700,000,  of 
which  $1,000,000  was  to  be  taken  by 
the  state.  These  two  institutions 
were  to  finance  the  new  public  im- 
provements throughout  the  state. 

Sectional  jealousies  would  not  al- 
low the  Board  of  Fund  Commission- 
ers to  concentrate  their  energies  on 
any  one  project.  It  decided  to  start 
all  seven  railroads  and  the  Illinois 
and  Michigan  canal  at  once.  From 
each  direction  from  any  town  to  be 
touched  by  any  railroad  work  was 
to  be  started,  with  local  contractors 
doing  the  work  as  far  as  possible. 
Counties  not  touched  by  railroads 
were  given  $200,000  each  for  high- 
way improvements. 

Things  were  going  well  in  the 
West,  when,  in  the  early  summer  of 
1837,  without  warning,  a  sudden 
crash  came  in  the  East.  Prices  de- 
clined, banks  failed,  and  business 
firms  failed  on  every  hand.  Local 
financiers  thought  things  in  Illinois 
were  on  too  stable  a  basis  to  be 
affected  by  this  eastern  flurry,  and 
did  little  to  prepare  for  the  future. 
The  panic  spread  and  in  1838  the 
legislature  voted  to  stop  work  on 
the  internal  improvement  system. 
The  state  had  incurred  a  debt  of 
$6  000,000  and  none  of  the  railroads 
had  been  completed.  The  Illinois  and 
Michigan  canal  had  its  own  board 
of  trustees  and  they  decided  even  in 
the  face  of  the  impending  panic  to 


continue  work  on  the  canal. 

The  banks  became  invloved  in  the 
panic  and  at  a  special  session  of  the 
legislature  an  act  was  passed  to 
legalize  the  suspension  of  specie 
payments.  The  activities  of  the  banks 
were  greatly  curtailed  by  this  act. 
The  Anti-Bank  Democrats  began  a 
determined  fight  on  the  two  insti- 
tutions. In  1839  the  State  Bank 
ceased  to  be  a  bank  of  issue  and 
ceased  to  do  business  except  to  dis- 
burse the  Canal  Fund,  and  to  deal 
with  some  eastern  exchange.  In  1843 
it  was  forced  into  liquidation.  Its 
notes  were  nearly  all  redeemed  and 
very  few  of  them  have  come  down 
to  us. 

The  Chicago  Branch  of  the  State 
Bank  opened  December  1,  1835  in  a 
building  at  the  corner  of  Clark  and 
Water  streets.  John  Kinzie  was  its 
president  and  its  board  of  directors 
included  most  of  the  leading  mer- 
chants of  the  city.  The  bank  did  a 
good  business  from  the  start.  In  1840 
due  to  some  trouble  with  some  of 
the  city's  leaders,  the  bank  was  re- 
moved to  Lockport,  as  a  punishment 
to  the  city.  As  the  bank  continued 
to  do  business  through  an  agent  in 
the  city,  the  punishment  lost  most 
of  its  force.  From  1839  to  1843  when 
it  finally  closed  it  did  little  except 
handle  Illinois  and  Michigan  Canal 
Funds,  and  issue  a  flood  of  paper 
money  based  upon  them. 

The  Fund  Commissioners  had  no 
banking  authority  but  they  issued 
paper  that  was  widely  circulated  as 
money.  These  were  really  promis- 
sory notes  of  small  value,  but  they 
circulated  freely  with  the  other 
paper.  While  the  public  improve- 
ment bubble  burst  in  1838,  some  of 
these  notes  circulated  well  along 
into  the  sixties.  They  were  finally 
cancelled  and  most  of  them  des- 
troyed in  1867. 

Very  few  notes  of  this  period  have 
come  down  to  us.  The  First  State 
Bank  issued  notes  in  denominations 


—16— 


of  $1,  $2,  $3,  $5,  $10  and  $20  but 
very  few  can  be  found  in  collections. 
All  but  about  $6,000  of  these  issues 
were  destroyed  in  the  bonfires,  or- 
dered by  the  state  legislature.  Notes 
of  the  Second  State  Bank  are  also 
scarce.  As  they  were  redeemed  they 
were  destroyed.  Notes  drawn  on  the 
Illinois  and  Michigan  Canal  Fund 
thru  Chicago  Branch  are  more  com- 
mon. The  first  issue  of  May  1,  1839, 
were  type  set  notes  in  denomina- 
tions of  $1,  $2,  $5,  $10  and  $100. 
Similar  issues  were  made  in  March 
of  1840,  while  the  bank  was  in  Lock- 
port.  In  the  fall  of  1840  some  beau- 


tiful engraved  notes  in  denomina- 
tions of  1,  2V2,  5,  10,  20,  50  and  100 
dollars  were  issued.  In  1842,  some 
of  this  last  issue  were  cut  down  in 
size  and  printed  on  the  reverse  with 
a  statement  that  they  represented 
an  indebtedness  of  the  Canal  Com- 
missioners. The  indebtedness  was  the 
same  as  the  face  value  of  the  muti- 
lated note. 

The  notes  issued  by  the  Board  of 
Fund  Commissioners  are  in  denomi- 
nations of  $2,  $3,  $5,  $10  and  $100. 
The  lower  values  are  quite  scarce. 
The  greater  part  of  these  notes  were 


$100  note  of  the  "Fund   Commissioner  of  the   State  of  Illinois"  and  a  $5 
note  of  the  "Internal  Improvement  Office." 

—17— 


destroyed  at  various  times  up  to  it  not  been  loaded  up  with  the  fan- 
the  year  1867.  tastic  internal  improvement  scheme, 
The  experiences  of  Illinois  in  and  with  too  much  legislative  tinker- 
state  banking  were  very  costly  to  ing;  with  the  closing  of  this  bank 
the  state.  The  first  bank  was  on  too  the  state  was  left  without  any  bank 
nebulous  a  base  to  have  any  chance  in  its  borders,  and  there  were  no 
of  success.  The  second  bank  might  legal  banks  in  Illinois  for  several 
have  had  some  chance  of  success  had  years  afterward. 


—18— 


Illegal  and  Free  Banking 


TN  1836  the  legislature  of  the 
state  of  Illinois  had  chartered 
the  Chicago  Marine  and  Fire  In- 
surance Company.  The  charter 
specifically  stated  that  the  company 
was  not  to  do  a  banking  business  or 
issue  any  notes  or  bills  to  be  passed 
as  money  or  "in  the  semblance  of 
bank  notes".  However,  as  early  as 
May  1837,  the  company  published 
an  advertisement  in  a  Chicago  news- 
paper saying  that,  in  consideration 
of  the  great  need  of  the  community, 
advantage  would  be  taken  of  the 
section  in  their  charter  which  per- 
mited  them  to  "receive  moneys  on 
deposit,  and  to  loan  the  same,  on 
bottomry,  and  respondentia,  o  r 
otherwise,  at  such  rates  of  interest 
as  may  now  be  done  by  the  existing 
laws  of  the  State."  The  company 
went  into  the  banking  business  and 
in  time  its  demand  certificates  of 
deposit  took  the  place  of  money. 
However,  the  company  complied 
with  their  charter  and  did  not  issue 
their  certificates  in  the  "semblance 
of  bank  notes."  It  was  not  long  be- 
fore these  certificates  became  an 
inportant  factor  in  commerce  of  the 
northwest. 
George  Smith  Bills 

George  Smith,  a  Scotch  farmer, 
came  to  Illinois  in  1834  and  becom- 
ing impressed  by  the  possible  fields 
for  investment  profit,  returned  to 
Scotland  and  organized  the  Scottish 
Illinois  Land  Investment  Company. 
In  1836  Messrs.  Strachan  and  Scott 
returned  with  Smith  to  Illinois  to 
act  as  managers.  They  took  a  trans- 
script  of  the  Chicago  Marine  and 
Fire  Insurance  Company  and  with  a 
few  changes  obtained  a  charter 
from  the  Territorial  Legislature  of 
Wisconsin  for  the  Wisconsin  Marine 
and  Fire  Insurance  Company.  The 


trio  was  joined  by  Alexander  Mit- 
chell, a  young  banker  from  Aber- 
deen, Scotland.  The  company's  stock 
of  $225,000  was  held  half  in  Scot- 
land and  half  by  these  four  men. 
The  new  company  issued  certificates 
of  deposit  engraved  like  bank  notes 
in  denomination  from  one  to  ten 
dollars. 

The  new  issue  worked  its  way  into 
circulation  despite  of  stiff  opposition 
from  Illinois  chartered  banks.  Be- 
fore long  the  new  notes  came  to  be 
known  as  reliable,  as,  in  contrast  to 
other  bills,  they  were  always  paid 
promptly  on  demand.  Soon  Illinois 
and  other  bank  notes  were  being  ex- 
changed at  les&  than  face  value  and 
the  "illegal"  currency  of  the  Wis- 
consin Marine  and  Fire  Insurance 
Company  was  required  in  larger  and 
larger  amounts.  By  December,  1841, 
some  $35,000  of  these  bills  were 
outstanding.  The  amount  increased 
to  $100,000  in  1843,  $300,000  in  1847 
and  steadily  increased  to  a  peak  cir- 
culation of  $1,470,000  in  1851.  After 
that  the  circulation  was  gradually 
contracted,  every  dollar  of  the  en- 
tire outstanding  amount  was  redeem- 
ed, except  $34,000  which  were  never 
presented — these  latter  notes  hav- 
ing, no  doubt,  been  lost,  burned  or 
worn  out. 

Legal  banks  and  others  who  were 
interested  in  stopping  the  progress 
the  institution  was  making,  exerted 
great  efforts  to  discredit  its  paper. 
Runs  were  instituted  on  the  agencies, 
and  banks  would  hoard  large  quan- 
tities of  the  illegal  notes  so  that 
they  might  be  presented  all  at  one 
time  and  thus  drain  the  specie  sup- 
ply of  the  company.  Nothing,  how- 
ever, seemed  to  avail.  According  to 
one  story,  Mr.  Scammon,  president 
of  the  Marine  Bank  of  Chicago,  had 


—19— 


been  enjoying  the  pastime  of  pre- 
senting large  amounts  of  "Smith's 
bills"  for  redemption.  One  day  he 
met  Mr.  Smith  who  asked  him  what 
amount  of  the  notes  of  his  (Scam- 
mon's)  bank  were  outstanding. 
When  Mr.  Scammon  replied  that 
there  were  just  $175,000.  Mr.  Smith 
quickly  informed  him  that  his  own 
vaults  contained  $125,000  of  that 
amount,  and  that  he  would  "bring 
them  over  for  redemption  one  of 
these  days."  That  remark  kept  Mr. 
Scammon  in  a  state  of  worry  for 
some  time  before  an  agreement  was 
reached  between  the  two  rivals 
whereby  each  was  pledged  not  to 
attempt  anything  to  the  detriment 
of  the  business  of  the  other.  Since 
"Smith's  bills"  could  not  be  driven 
out  and  gained  such  popularity  that 
soon  agencies  for  their  redemption 
were  established  at  Galena  (111.), 
St.  Louis,  Cincinnati,  and  Detroit. 

George  Smith,  operating  under 
the  title  of  George  Smith  and  Com- 
pany, continued  in  business  in  Chi- 
cago on  LaSalle  street  until  1857, 
when  the  house  was  closed.  Shortly 
thereafter  he  retired,  having  acquir- 
ed large  sections  of  valuable  prop- 
erty in  Chicago  and  elsewhere,  to- 
gether with  a  sizable  fortune  in  se- 
curities. Smith  spent  most  of  his  re- 
maining days  in  Scotland. 

Smith's  success  encouraged  others 
to  undertake  similar  illegal  note  is- 
sues and  a  number  of  unincorporated 
companies  were  organized  to  issue 
money  which  circulated  at  variable 
discounts.  The  Merchants'  and  Me- 
chanics' Bank  of  Chicago  was  one  of 
the  more  successful  in  this  business 
of  issuing  illegal  currency. 
Free  Banking 

After  a  bitter  fight  between  "free 
banking"  and  "anti-banking"  groups 
which  started  in  the  year  1846,  at  a 
special  election  the  Free  Banking 
Act  of  1851  was  adopted  by  a  vote 
of  37,626  to  31,405.  One  of  the  re- 
quirements of  the  act  was  that  any 


person  who  desired  to  engage  in  the 
issue  of  notes  be  required  to  deposit 
with  the  State  Auditor  bonds  issued 
by  the  United  States,  the  state  of 
lillinos,  or  any  state  which  paid  full 
six  percent  interest.  The  deposit  of 
the  first  two  classes  of  bonds  en- 
titled the  owner  to  circulate  notes 
to  the  full  market  value  of  the 
onds,  but  not  more  than  half  their 
par  value. 

When  first  passed,  this  new,  so- 
called  "free"  banking  law  of  1851, 
could  be  and  was  so  construed  that 
two  kinds  of  banks  were  established, 
each  under  the  supervision  of  the 
state  auditor,  but  one  issuing  notes 
secured  by  deposited  bonds  and  the 
other  simply  issuing  unsecured 
notes. 

This  act  was  responsilbe  for  the 
creation  of  many  varieties  of  early 
paper  money  for  which  the  collector 
of  today  may  seek.  Newspapers  of 
the  period  tell  of  the  establishment 
and  the  circulation  of  notes  of  many 
banks  that  no  specimens  have  come 
down  to  us. 

Banks  were  slow  to  be  organized 
under  the  new  law.  In  1852  the 
Senate  decided  to  repeal  the  act  and 
there  was  a  great  rush  to  incorpo- 
rate banks  before  the  law  was  re- 
pealed and  within  a  few  days  twen- 
ty-seven applications  were  made. 
Later,  when  the  law  was  not  repeal- 
ed, the  number  of  banks  again  fell 
off,  until  in  1854  the  banking  com- 
missioners reported  that  there  were 
only  twenty-nine  banks  operating 
under  the  law,  ten  in  Chicago,  two 
each  in  Springfield  and  Naperville, 
and  not  more  than  one  in  any  other 
city.  The  issues  of  these  banks  con- 
stituted but  a  small  amount  of  the 
circulation,  while  illegal  issues  and 
those  of  foreign  banks  continued  to 
bourish. 

For  a  period  a  bank  war  waged, 
but  little  could  come  of  all  the  agi- 
tation because  of  the  intricate  situ- 
ation which  existed.  Legally  estab- 


—20— 


The  Bank  of  Chicago 


/^  I        <//'/. '" // TWO  D  0 LL AR S 

,9m.  $*•     ^       / 


Upper — A  "George  Smith"  note  of  Marine  and  Fire  Insurance  Company. 
Middle — $1.00  of  the  Bank  of  Chicago  showing  signature  of  Seth  Paine. 
Lower— $2.00  note  of  Bank  of  Belleville  with  State  Auditor's  seal  in  corner. 

—21— 


lished  banks  were  issuing  illegal 
bills;  some  few  banks  did  a  strictly 
legal  business,  even  going  so  far  as 
to  absorb  illegal  banks  and  issue 
legal  for  the  illegal  currency  out- 
standing. The  Chicago  Marine  Bank, 
which  had  organized  under  the  law, 
was  accused  of  having  revived  its 
old  insurance  company  and  of  mak- 
ing legal  loans  thereto,  so  that  the 
latter,  in  turn,  might  circulate  il- 
legal bills  for  profit.  Some  banks 
were  so  bold  as  to  issue  illegal  cur- 
rency for  buying  bonds  that  might 
be  deposited  with  the  auditor 
against  legal  issues.  As  a  conse- 
quence, the  bankers,  under  J.  Y. 
Scammon  of  the  Marine  Bank  of 
Chicago,  determined  to  put  an  end 
both  to  the  actual  illegal  practices 
and  to  unjust  accusations  of  such 
dishonesty  by  getting  the  legislature 
to  pass  an  amendment  to  the  bank 
law  which  would  prohibit  all  illegal 
banking.  On  Februaiy  10,  1853,  this 
was  passed  and  to  conduct  a  bank- 
ing business  within  the  state  ex- 
cept under  the  provisions  of  the 
statutes  was  made  little  less  than 
a  felony. 

In  prohibiting  illegal  currency, 
more  than  the  powers  of  the  law 
were  required  to  accomplish  the  re- 
sult. The  public  had  been  trained  to 
accept  the  illegal  issues,  such  as  the 
George  Smith  notes  in  preference  to 
legal  issues.  Also,  men  like  Smith 
had  bought  interests  in  foreign 
banks  and  were  circulating  their 
issues  in  Illinois,  and  foreign  banks 
had  established  agencies  in  the 
state  for  the  purpose  of  circulating 
and  redeeming  their  notes.  Nebras- 
ka established  agencies  at  Gales- 
burg,  Peoria,  Macomb  and  other  Il- 
linois cities.  Some  states  would  per- 
suade residents  of  Illinois  to  take 
stock  in  their  banks  and  so  attain  a 
right  to  the  bank's  notes;  such 
stockholders  would  then  agree  to 
help  keep  each  other's  notes  in  cir- 
culation, and  so  "wild  cat"  issues 


both  good  and  bad  followed. 
Seth  Paine  Notes 

Into  this  warfare  stepped  Seth 
Paine  &  Co.,  when  it  opened  the 
Bank  of  Chicago  on  September  1, 
1852. 

Seth  Paine  was  a  native  of  New 
England.  He  arrived  in  Chicago  by 
boat  in  1834.  When  he  landed  he  was 
without  a  cent  of  capital,  having 
paid  his  last  dollar  for  his  fare  on 
the  boat.  We  are  told  he  was  tall 
and  straight  with  a  pleasing  pre- 
posing  manner.  He  was  an  excellent 
conversationalist  and  a  fine  public 
speaker.  He  hired  out  to  the  firm  of 
Tailor  &  Breese,  and  in  a  short  time 
became  a  partner  in  the  firm.  Later 
he  went  into  partnership  with  The- 
ron  Norton  under  the  name  of  Paine 
&  Norton.  He  sold  out  to  Norton  in 
1842. 

During  his  early  years  in  Chicago 
he  became  an  ardent  abolitionist  and 
a  follower  of  the  socialistic  doctrines 
of  Fourier.  When  he  sold  out  to 
Norton  he  went  up  into  Lake  County 
and  bought,  with  a  number  of 
others,  a  large  tract  of  land  at  Lake 
Zurich  to  try  out  some  of  these  so- 
cialistic ideas.  After  a  time  we  find 
him  one  of  the  directors  and  a  man- 
ager of  the  unchartered  Illinois 
River  Bank  at  La  Salle. 

About  this  time  he  became  an  ar- 
dent spiritualist.  His  type  of  mind 
was  such  that  he  readily  adopted 
every  new  "ism"  that  came  along. 
To  him  the  world  was  sadly  out  of 
joint  and  he  looked  upon  himself  as 
the  one  to  set  it  right.  The  chaotic 
state  of  the  banking  business  was 
such  that  he  decided  to  return  to 
Chicago  and  teach  his  old  business 
associates  how  banking  could  be 
carried  on  in  accordance  with  a 
higher  law  than  the  banking  law  of 
Illinois. 

The  prospectus  of  the  new  bank 
written  by  Paine  himself,  stated 
several  principals,  "We  loan  to  no 
one  to  pay  debts.  We  loan  to  no  one 


—22— 


to  aid  in  the  murder  of  anything 
which  has  life.  We  loan  to  no  man 
to  speculate  in  the  necessities  of  life. 
We  loan  nothing  on  real  estate,  be- 
lieving that  it  can  not  be  bought  or 
sold,  possession  with  use  is  the  only 
title  to  it.  We  loan  nothing  to  aid  in 
the  manufacture  or  sale  of  liquor  or 
tobacco.  We  loan  nothing  to  gam- 
blers or  money  lenders.  Our  basis 
for  making  loans  is  the  established 
character  of  the  borrower.  He  must 
be  temperate,  honest  and  religious 
with  a  mind  sufficiently  developed 
to  understand  business." 

For  a  few  weeks  the  bank  did  a 
quiet  business  with  a  class  of  re- 
spectable citizens  who  approved  of 
the  sentiments  in  the  prospectus. 
Paine  and  Eddy,  his  partner,  were 
both  ardent  spiritualists  and  they 
began  to  bring  spiritualism  into  the 
management  of  the  bank.  A  trance 
medium,  Mrs.  Herrick  was  brought 
into  the  bank  to  give  the  officers  the 
advice  of  departed  spirits.  The  spirit 
of  Alexander  Hamilton  was,  thru 
Mrs.  Herrick,  to  direct  the  policy  of 
the  bank.  If  a  person  came  in  to  do 
business  and  Mrs.  Herrick  or  the 
spirits,  did  not  approve  him  he  was 
unceremonously  thrown  out  into  the 
street  by  some  burly  bouncers  kept 
for  that  puporse.  No  smokers, 
drinkers  or  bankers  were  to  be 
served.  Women,  children,  negroes 
and  spiritual  minded  men  were  to 
be  served  in  that  order.  During  this 
time  Paine  published  a  little  paper 
called  the  Chirstian  Banker.  The  ar- 
ticles were  rambling  discourses, 
witty  and  sarcastic,  containing  a 
mixture  of  spiritualism,  banking 
and  personal  attacks  on  his  enemies 
that  made  many  think  he  was  crazy. 
Ira  B.  Eddy  had  put  most  of  the 
cash  into  the  bank  and  when  his 
friends  saw  how  the  business  was 
being  conducted  they  had  him  adjud- 
ged insane,  and  had  an  injunction 
served  to  protect  Mr.  Eddy's  inter- 
ests in  the  bank. 


This  caused  a  run  on  the  bank. 
Paine  and  Mrs.  Herrick  stood  behind 
the  counter  to  redeem  the  bills  that 
had  been  issued.  Several  prominent 
citizens  who  could  not  satisfy  the 
spirits  of  the  justness  of  their 
claims  were  unduly  hustled  out  and 
thrown  into  the  street. 

Things  came  to  a  head  the-  next 
day.  The  conservator  of  Eddy's  es- 
tate tried  to  take  over  the  affairs  of 
the  bank,  and  he  met  with  threats 
of  shooting.  Finally  the  whole  corps 
of  the  bank — officers,  mediums, 
bouncers  and  all,  were  arrested  and 
tried.  Two  or  three  were  discharged 
and  all  of  the  rest  except  Mrs.  Her- 
rick were  put  under  peace  bonds  of 
$500.  She  was  kept  in  jail  for  re- 
sisting officers. 

With  the  removal  of  Eddy's 
money  the  bank  was  so  badly  crip- 
pled that  it  soon  went  out  of  busi- 
ness. Every  note  that  was  presented 
was  paid  by  Paine,  or  Eddy's  con- 
servator. The  bank,  as  bazarre  as 
was  its  existence,  was  neither  dis- 
honored nor  insolvent. 

After  the  closing  of  the  bank 
Paine  returned  to  Lake  Zurich, 
where  he  tried  out  many  of  his 
schemes.  He  established  a  school  on 
his  farm  called  "the  Stable  of  Hu- 
manity" which  he  managed  for  sev- 
eral years.  In  1868  he  returned  to 
Chicago  and  established  a  "Women's 
Home".  The  object  of  this  was  to 
provide  respectable  women  a  com- 
fortable home  at  a  moderate  price. 
This  he  operated  for  about  three 
years.  He  died  in  Chicago  in  1871. 

While  Seth  Paine's  excursion  into 
banking  was  short  lived,  he  fur- 
nishes the  history  of  banking  in 
Chicago  with  one  of  the  most  color- 
ful figures  it  has  ever  seen. 
The  End  of  Illinois  Bank  Notes 

At  the  time  of  Lincoln's  election 
in  1860,  business  was  so  good  that 
the  banks  had  increased  their  cir- 
culation and  inflated  currency  until 
the  state  of  Illinois  had  an  aggreg- 


—23— 


ate  circulation  of  $12,320,694,  se- 
cured by  deposits  of  United  States 
and  state  securities  with  a  par  value 
of  $14,000,000.  Of  this  amount 
$9,527,500  consisted  of  bonds  of  the 
southern  states.  Immediately  follow- 
ing the  election,  the  credit  of  the 
South  began  to  diminish.  Large 
deposits  held  by  that  part  of  the 
country  in  northern  banks  were  sud- 
denly withdrawn,  which  together 
with  the  depreciation  in  southern  se- 
curities threatened  financial  chaos 
for  Illinois. 

In  March,  1861,  at  which  time 
twenty-two  banks  were  to  make 
good  the  demand  of  the  commis- 
sioners for  more  security  to  cover 
their  notes,  seventeen  with  a  total 
circulation  of  $2,726,795  were  un- 
able to  comply  and  were  placed  in 
liquidation.  By  now  southern  states 
were  seceding  one  at  a  time  and 
their  bonds  declining  more  and 
more  rapidly  in  market  value.  The 
bonds  of  Missouri,  which  on  April 
1  were  quoted  at  sixty-seven  cents 
on  the  dollar,  were  worth  only  fifty- 
one  by  the  17th  and  their  future 
prospects  were  growing  steadily  less 
attractive.  By  the  end  of  April,  Chi- 
cago bankers,  who  had  previously 
carried  the  bills  of  a  large  number 
of  Illinois  banks  whose  bonds  se- 
curing their  currency  had  depreciat- 
ed, made  a  list  of  thirty-two  which 
they  felt  could  not  be  carried  any 
longer  unless  the  deficiencies  were 
speedily  made  up.  This  decision  was 
really  brought  about  by  a  citizen 
who  circulated  an  article  entitled 
"Stand  From  Under,"  warning  the 
people  of  the  state  against  taking 
the  notes  of  these  thirty-two  banks. 
Immediately  the  issues  of  these 
banks  flowed  into  the  offices  of  Chi- 
cago bankers  for  redemption  in 
such  quantities  that  it  seemed  the 
bankers  would  soon  have  millions 
of  them  on  hand. 

Since  the  southern  bonds  securing 
these  bills  appeared  not  likely  to 


rise  in  value,  the  bankers  could  not 
well  undertake  the  risk  of  holding 
large  quantities  of  this  currency  and 
so  were  forced  to  discredit  it,  even 
at  a  greater  loss  to  themselves  than 
to  their  depositors.  In  addition  to 
these  thirty-two,  nine  others  had 
been  previously  thrown  out  and  the 
situation  which  now  developed  was 
subsequently  referred  to  as  an  "era" 
in  the  financial  annals  of  the  state. 

The  monetary  column  of  the  Chi- 
cago Tribune  of  April  2,  1861,  im- 
mediately after  the  discrediting  of 
these  banks,  listed  all  banks  in  the 
state  and  showed  that  there  were 
then  sixty-four  doing  business  with 
their  notes  still  accepted,  while 
thirty-nine  were  doing  business  with 
their  notes  in  disrepute.  Outside 
Chicago  such  discredited  notes  were 
sometimes  accepted  at  fifty  cents  on 
the  dollar.  General  financial  disorder 
reigned  and  uncertainty  became  so 
great  that  exchange  on  the  East 
not  only  rapidly  rose  but  showed 
signs  of  going  higher. 

Currency  became  so  variable  as  to 
be  of  little  use  as  money.  The  bills 
of  banks  backed  by  northern  se- 
curities, or  those  of  banks  which  had 
made  good  their  bond  deficits,  re- 
tired from  circulation,  driven  out  by 
those  less  stable  banks.  The  poorer 
bills  flooded  the  country  and  it  be- 
came necessary  for  daily  bulletins 
to  be  issued  listing  bills  according 
to  their  present  worth  in  terms  of 
exchange  and  specie.  Railroads, 
boards  of  trade,  newspapers,  and 
other  groups  issued  lists,  no  two  of 
which  lists  agreed.  No  holder  of 
bank  bills  knew  from  one  day  to 
the  next  what  his  holdings  were 
worth.  Notes  that  were  bankable 
one  day  were  worthless  the  next. 
The  situation  was  pretty  much  the 
same  over  the  entire  country.  With 
between  1500  and  2000  kinds  of 
paper  money  circulating  thruout  the 
country  a  "bank  note  detector"  was 
an  essential  to  the  merchant.  Some 


—24— 


of  these  books  went  into  detail  des- 
cribing the  distinguishing  charact- 
eristics of  more  than  a  thousand 
bills.  One  of  the  best  known  of  these 
bank  note  guides  was  "Thompson's 
Bank-Note  Reporter"  which  was 
established  in  1836  by  John  Thomp- 
son, who  was  one  of  the  organizers 
of  the  First  National  Bank  of  New 
York  and  also  of  the  Chase  National 
Bank  of  New  York. 

Banks  were  rapidly  forced  into 
liquidation  and  notes  poured  into  the 
office  of  the  state  auditor  at  such  a 
rate  that  on  occasions  he  had  to 
close  his  doors  until  the  accumula- 
tion could  be  counted,  cancelled  and 
burned.  On  January  1,  1862,  only 
three  Illinois  banks  had  notes  on  a 
par  basis.  In  November,  1860,  there 
had  been  one  hundred  and  ten  sol- 
vent banks  with  a  circulation  of 
$12,320,694,  while  just  two  years 
later  the  total  circulation  of  the 
state  amounted  to  only  $566,163.  In 
spite  of  a  bad  situation  the  banks 


were  liquidated  in  such  a  manner 
that  they  managed  to  pay  an  aver- 
age of  sixty  percent  on  their  cir- 
culation. 

The  federal  government  issue  of 
greenbacks  and  a  little  later  national 
bank  notes,  soon  started  to  replace 
local  currency.  By  1864  only  twenty- 
three  banks  remained  in  the  state. 
In  1866  the  federal  tax  on  state  bank 
notes  drove  most  of  the  currency, 
which  until  then  had  persisted,  out 
of  circulation  and  by  1869,  accord- 
ng  to  the  state  auditor's  report, 
there  were  only  $531  in  bank  notes 
outstanding  in  the  state.  This  small 
amount  of  unredeemed  notes  ac- 
counts for  the  rarity  of  Illinois 
bank  notes  today.  There  are  many 
issues  of  which  only  one  or  two 
specimens  are  known  to  be  held  by 
collectors.  Most  of  the  notes  which 
have  been  preserved  for  numisma- 
tists are  canceled  notes  which  some 
how  were  not  destroyed  at  the  time. 


—25— 


Check  List  of  Early  Illinois  Paper  Money 

BY  D.  C.  WISHER  and  LEE  F.  HEWITT 


STATE  ISSUES 
State  of  Illinois 

Office  of  the  Board  of  Public 
Works;  Fund  Commissioner  of 
the  State  of  Illinois 

$2.,  $3.,  $5.,  $10.,  $100. 
Internal    Improvement    Office 

$2.,  $3.,  $5.,  $10. 


BANK  ISSUES 
Albion 

Albion  Exchange  Bank 

$1.25,  $2.50 
Bank  of  Albion 

$5.,   $10. 
Alledo 

Bank  of  Alledo 

$5. 
Alton 

Alton  Bank 

$1.,  $2.,  $3.,  $5.,  $5.,  $10. 
Anna 

Wheat  Grower's  Bank 

$1.,   $2.,   $5.,   $10. 
Aurora 

Bank  of  Aurora 

$1.,  $2.,  $3.,  $5. 
Belleville 

Bank  of  Belleville 
$1.,  $2.,  $3.,  $5. 
Southern  Bank  of  Illinois 

$1.,  $2.,  $5.,  $10. 
Belvidere 

Belvidere  Bank 

$1.,  $3.,  $5. 
Benton 

Frontier  Bank 

$5. 
Union   Bank 

$1.,   $2. 
Bloomington 

Bank  of  Bloomington 

$1.,  $2.,  $3.,  $5. 
Lafayette  Bank 

$1.,  $2.,  $3.,  $5.,  $5. 


McLean   County   Bank 

$1.,  $2. 
Bolton 

Bank  of  Southern  Illinois 

$1.,   $2.,  $3.,  $5.,  $10. 
Cairo 

Bank   of  Cairo 

$1.,  $2.,  $2.,  $3.,  $5.,  $5. 
City   Bank  of  Cairo 

$1.,   $2.,   $3.,   $5. 
The  Planters   Bank 

$1.,   $2. 
Caledonia 

Bluff  City  Bank 

$2.,  $5. 
Carmi 

Bank  of  Carmi 

$1.,  $2.,  $5.,  $10. 
Merchants    Bank 

$5.,  $10. 
People's  Bank 

$1.,  $2.,  $5. 
Charleston 

Farmer's  &  Trader's  Bank 

$1.,  $2.,  $3.,  $5. 
Chester 

Bank  of  Chester 

$1.,  $2.,  $3.,  $5. 
Chicago 

Bank   of   America 

$1.,   $2.,  $3. 
Bank  of  Chicago  (Seth  Paine) 

$1.,   $1.,   $2.,  $2.,   $3.,   $3. 
Bank  of  Commerce 

$1. 
Branch  of  the   State   Bank 

$1.,  $2.,  $5.,  $10.,  $100. 
Chicago  Bank 

$1.,  $2.,  $3.,  $5. 
City   Bank  of  Chicago 

$1.,  $1.,  $1.,   $2.,  $3.,  $5. 
Commercial  Bank 

$1.,  $3.,  $5. 

E.   I.   Tinkham   &   Company's 
Bank 

$1.,  $2.,  $3.,  $5. 


Chicago — Continued 

Exchange  Bank  of  H.  A.  Tucker 
&  Co. 

$1.,  $2.,  $3.,  $5. 
Farmer's  Bank 

$1.,  $2.,  $5. 
Marine  Bank  of  Chicago 

$1.,  $1.,   $2.,   $3.,   $5.,   $5., 

$5.,   $10. 
Phenix  Bank 

$1.,  $2.,  $3.,  $5. 
R.  K.  Swifts  Loan  &  Trust  Bank 

Bill   of  Exchange 
Treasurer's   Bank 

$1. 
Trader's  Bank 

$1. 
Union  Bank 

$1.,    $2.,    $3. 
Danville 

Stock  Security  Bank 

$1.,   $2.,   $5. 
State  Bank  Branch 

$1.,  $10. 
Decatur 

Railroad  Bank 

$1.,  $2.,  $3.,  $5. 
Edwardsville 

Bank  of  Edwardsville 

25c,  50c,  $1.,  $2.,  $3.,  $5.,  $10., 

$20.       (also  post  notes) 
Elgin 

Bank  of  Elgin 

$1.,  $2.,  $5. 
Elgin  Bank  of  D.  Clark  &  Co. 

$2. 
Home  Bank 

$1.,   $2. 
Elizabethtown 

Shawanese   Bank 

$1.,  $2.,  $3.,   $5. 
Equality 

Illinois   State  Security  Bank 

$5.,   $10. 
National  Bank 

$1.,   $3.,   $5. 
Fairfield 

Corn  Exchange   Bank 

$1.,  $2.,  $3.,  $5. 
Reaper's  Bank 

$1.,   $2.,   $3.,   $5. 


Galena 

Bank  of  Galena 

$1.,  $2.,  $3.,  $5. 
Galesburg 

Reed's  Bank 

$1.,  $2.,  $3.,  $5. 
Galatea 

Bank  of  Galatea 

$5.,  $10. 
Geneva 

Kane  County  Bank 

$1.,  $2.,  $3.,  $5. 
Geneseo 

Bank  of  Geneseo 

$5. 
Golconda 

Bank  of  Ashland 

$5. 
Ohio  River  Bank 

$1.,  $2.,  $3.,  $5.,  $10.,  $20. 
Granville 

Continental  Bank 

$5.,  $10. 
Grayville 

Grayville  Bank 

$1.,  $2.,  $5.,  $10. 
Southern  Bank  of  Illinois 

$1,.   $2.,   $5.,   $10. 
Greenup 

Cumberland  County  Bank 

$2.,    $5. 
Griggsville 

Bank  of  Pike  County 

$1.,  $2.,  $3.,  $5.,  $10. 
Pamet  Bank 

$1.,  $2.,  $3.,  $5. 
Hardin 

Illinois    River    Bank 

$1.,    $2. 
Mechanic's   Bank   of  Hardin 

$1.,  $2.,  $3.,  $5. 
Harrisburg 

Lake   Michigan   Bank 

$5.,   $10. 
Hutsonville 

Bank   of  Hutsonville 

$1.,  $2.,  $5. 
Garden  State  Bank 

$1.,  $2.,  $2.,  $5. 
Jacksonville 

Morgan   County   Bank 
$1.,  $2.,  $5.,  $10. 


—27— 


Jacksonville — Continued 

Branch  of  State  Bank 

$5. 
Joliet 

Merchants  &  Drovers  Bank 

$1.,  $2.,  $3.,  $5. 
Jonesboro 

Union  County  Bank 

$5.,   $10. 
Kankakee 

Kankakee  Bank 

$1.,    $2. 
Kaskaskia 

Bank  of  Cairo  at  Kaskaskia 
$1.,   $1.,   $2.,   $3.,   $3.,   $5., 
$5.,  $10. 
Kewanee 

Bank  of  Kewanee 

$1.,   $2.,   $5. 
Lacon 

Marshall  County  Bank 

$1.,  $5. 
Lancaster 

Lancaster  Bank 

$5.,   $10. 
LaSalle 

LaSalle  Bank 

$2. 
Lockport 

State  Bank  of  Illinois 
$1.,   $2.50   $5.,   $50. 
Illinois    &    Michigan    Canal    In- 
debtedness, printed  on  back  of 
State  Bank  notes   of  the   same 
denomination 

$2.50,   $5.,   $20.,   $50.,   $100. 
Marion 

Agricultural  Bank 
$1.,  $2.,  $2.,  $5. 
Maihaiwe  Bank 

$1.,   $2.,  $3.,  $5. 
Marshall 

Corn  Planters   Bank 

$2.,  $3.,  $5. 
McLeansboro 

Bank  of  the  Republic 

$1.,   $2.,  $3.,  $5. 
E.  I.  Tinkham  &  Co.  Bank 
(Branch) 

$1.,  $2.,  $3.,  $5.,  $10.,  $20. 
Hamilton  County  Bank 
$1.,   $2.,  $3.,  $5. 


The  Hampden  Bank 

$1. 
Metropolis 

Farmers  Bank 

$1.,  $3.,  $5.,  $10. 
Momence 

Bank  of  Momence 

$1.,  $2.,  $3.,  $5. 
Mon  mouth 

Warren  County  Bank 

$5. 
Morris 

Grundy  County  Bank 

$1.,  $5. 
Mt.  Carmel 

Bank  of  America 

$5.,   $10.,   $20.,   $50.,   $100. 
Branch  of  State   Bank 

$3. 
Citizen's  Bank 

$1.,  $2.,  $5.,  $10. 
Mt.  Vernon 

Bank  of  Mt.  Vernon 

$1.,  $2. 
Naperville 

Bank  of  Naperville 

$1.,  $2. 
Dupage  County  Bank 

$1.,  $3.,  $5.,  $10. 
Humboldt  Bank 

$1. 
New   Haven 

Bank    of    Illinois 

$1.,  $3.,  $5. 
Commercial  Bank 

$2.,  $3.,  $5. 
Illinois   State  Bank 

$5.,  $10. 
New  Canton 

Farmers  Bank 

$5. 
New   Market 

Bank  of  the  Metropolis 

$5.,  $10. 
New  Market  Bank 

$5.,  $10. 
Newton 

Illinois  Central  Bank 
$1.,  $2.,   $10.,  $20. 
Ottawa 

Bank  of  Ottawa 
$1.,  $2.,  $3.,  $5. 


Ottawa — Continued 

City  Bank 
$1.,  $5. 
Oxford 

Mississippi  River  Bank 

$1.,  $2.,  $5.,  $10. 
Palestine 

Commercial  Bank 

$1.,  $2.,  $5.,  $10. 
Paris 

Edgar  County  Bank 

$1.,   $2.,  $3.,  $5. 
Peoria 

Central  Bank 
$1.,   $3.,   $5. 
Farmers   Bank 

$5. 
Peru 

Bank   of   Peru 

$1.,  $2.,  $3. 

Illinois  River  Bank  of  Taylor 
&  Coffin 

$1. 
Pittsfield 

Highland  Bank 

$5.,   $10. 
Pittsfield  Bank 

$1.,  $2.,  $5.,   $5. 
Prairie  City 

Graziers   Bank 

$5. 
Quincy 

Bank  of  Quincy 

$1.,  $2.,  $3.,  $5.,  $10.,  $20 
Quincy  City  Bank 

$1.,  $2.,  $3.,  $5.,  $10.,  $10., 
$20.,  $20. 
Raleigh 

American  Exchange  Bank 

$5.,   $10. 
Bank  of  Raleigh 

$5.,  $10. 
International  Bank 

$5.,   $10. 
Robinson 

Bank  of  the  Commonwealth 

$5.,  $10. 
Rockford 

Lumberman's    Bank    of    E.    L. 
Fuller  &  Co. 
$2.,  $3.,  $5 


Rock  Island 

Bank  of  the  Federal  Union 

$1.,  $5. 
Rock  Island  Bank 

$1.,    $1.,    $2.,    $2.,    $3.,    $3., 
$5.,  $5. 
Rushville 

Rushville  Bank 

$2.,  $3.,  $5.,  $10. 
St.  John's 

State  Stock  Bank 

$1.,  $5. 
St.  Marie 

Bull's  Head  Bank 

$5.,   $10. 
Savannah 

Western  Bank 

$1.,  $2.,  $3.,  $5.,  $10.,  $20. 
Schawance  Town 
Bank  of  Illinois 

$1.,  $2.,  $3.,  $5. 
Shawneetown 

Bank  of  Illinois 

$1.,   $2.,   $3.,   $20.,   $20.,   $50., 
$100. 
State  Bank  of  Illinois 

$1.,  $2.,  $3.,  $5.,  $10. 
Sparta 

United  States  Stock  Bank 

$1. 
Bank  of  Sparta 

$1.,  $2.,  $3. 
Springfield 

Clark's  Exchange  Bank 

$1.,  $2.,  $3.,  $5.,  $10.,  $20. 
Mechanics  &  Farmers  Bank 

$1 

State   Bank   of   Illinois    (parent 
bank) 

$1.,  $1.,  $2.50,  $5.,  $10.,  $20., 
$100. 
State  Bank  of  Illinois  Branch 

$5.,  $10. 
Sycamore 

Sycamore  Bank 

$1.,  $5. 
Taylorville 

Plowman's   Bank 

$2. 
Thebes 

Canal  Bank 
$3.,  $5. 


Thebes — Continued 
Eagle  Bank 

$1.,  $2.,  $3.,  $5. 
Urbana 

Grand  Prairie   Bank 

$1.,  $2.,  $5.,  $10. 
Vandalia 

State  Bank  of  Illinois  (the  first 
state  bank,  1821) 

$1.,  $2.,  $3.,  $5.,  $10.,  $20. 
Vermont 

Fulton  Bank 

$3.,  $5. 
Vienna 

Narragansett  Bank 

$2.,  $3.,  $5.,  $10. 
Bank  of  Commerce 

$5.,   $10. 
Washington 

Prairie  State  Bank 
$1.,  $3.,  $5.,  $10. 
Waukegan 

Bank  of  Northern  Illinois 

$1.,  $2. 
West  Aurora 

Bank  of  Aurora 

$1.,  $2.,  $3.,  $5. 
Woodstock 

Woodstock   Bank 
lOc. 


CITY  AND  TOWN   ISSUES 

City  of  Bloomington,  McLean  County 

lOc,  25c,  50c,  $1. 

Bureau  County,  Board  of  supervi- 
sors, annual  meeting,  1864,  Sol- 
dier's Relief  Fund 

$2. 
City  of  Columbia,  Monroe  County 

lOc,   25c 

City  of  East  St.  Louis,  St.  Clair 
County 

$1.,  $2.,  $5. 
Griggsville,  Treasury  Note 

$2. 
Kankakee  City,  Kankakee  County 

25c 
Mound  City,  Pulaski  County 

5c,  25c 


TRANSPORTATION  ISSUES 
Bloomington 

Chicago,  Alton  &  St.  Louis  R.R. 

$10. 
Chicago 

Chicago  &   Southwestern  Plank 
Road  Co. 

$1. 
Lockport 

Illinois  &  Michigan  Canal  Fund 
notes  on  the  State  Bank 

$1.,  $1.,  $2.,  $2.50,  $2.50,  $5., 
$5.,    $5.,    $10.,    $100.,     $100., 
$100.,  $150. 
East  St.  Louis 

Illinois  River  Packet  Co. 

lOc 
Joliet 

Oswego  &   Indiana  Plank  Road 
Co. 

$1.,  $2.,   $3.,  $5. 
LaSalle 

Illinois  &  Rock  River  R.R. 

$2.,  $3. 
Pekin 

Illinois  River  Railroad  Co. 

lOc,  25c 
Illinois  &  Rock  River  R.R. 

25c 
Peru 

Salisbury  Plank  Road  Co. 

$1. 
Shoal  Creek 

Shoal    Creek    Toll-Bridge     (re- 
deemable    at    J.    H.   Lambert's 
Store  in  Carlyle,  Feb.  14,  1820) 
25c 


SCRIP  ISSUES 
Alton 

Jones    &    Sawyer 
25c 
Beardstown 

Champlin   Smith   &   Co.  on   the 
banking  house  of  J.  C.  Leonard 
&   Co. 
lOc,  $10. 


Belleville 

St.   Clair   Savings   &   Insurance 
Co. 

lOc,  50c 
Bishops  Hill 

L.  Bjorkland,  (Nov.  1,  1862) 

25c,  50c 

Western    Exchange    &    Marine 
Insurance  Co. 

25c,  50c,  $1.,  $2.,  $3.,  $5. 
Bloomington 

Evergreen    City    Business    Col- 
lege 

10c,  25c 
Breese 

R.  S.  M.  Donne 

lOc 
Chebanse 

E.  S.  Richmond 

lOc 
Chenoa 

J.  R.   Snyder 

25c 
Chicago 

Luman    Burr,    Camp    Douglass, 
Post   Sutler 

25c 
Chadwick  &  Co. 

$1. 

Chicago   Marine   &   Fire   Insur- 
ance Co. 

$1.,  $2.,  $3.,  $5. 
Chicago  Times 

5c 
Thomas    Church 

25c 
Philip  Conley,  137  Lake  St. 

25c,  25c 
Crosby  Opera  House,  1866. 

$5. 
DeGraff  &  Co.,  advertising  note 

$15. 
A.  0.  Downs,  150  Lake  St. 

25c 

Eastman's    College    note,    Mer- 
chants National  Bank 

$3. 
North  Chicago   Rolling  Mill 

$10. 
P.  Palmer  &  Co.,  112-116  Lake 

25c,  50c 


Pedman  &  Co. 

25c,  50c 

Geo.  Randolph    (payable   in  111. 
&  Michigan  Canal  6%  scrip) 

5c 
Ross  &  Co.,  167  Lake  St. 

25c 

Stein,    Advertising    note,    1868, 
83  Clark  St. 

$3. 
Stryker  &  Co.,  150  Lake  St. 

25c 
Danville 

Tincher  &  English 

50c 
Dixon 

Dixon  Hotel  Co. 

$2.,  $3.,  $5. 
Dixons  Ferry 

Dixon  Hotel  Co. 

$3.,  $5. 
Dunton 

J.  M.  Olmstead 

50c 
El  Paso 

Van  Vleet  &  Bois 

50c 
Freeport 

John   Long,   on   the   Stephenson 
County  Bank 

lOc,  15c 
Jos.  Louchheim 

25c,  50c 

Wm.    P.    Malbum,    on  Farmers 
Bank 

5c,  5c,  25c,  25c,  50c 
Hanover 

H.  A.  Hallerman,  1862. 

25c,  50c 
P.  Lampen  &  Co. 

$1. 
Jackson 

Illinois     Exporting,     Mining     & 
Manufacturing  Co.,   (Inc.   1833) 

$1.,  $2.,  $3.,  $10. 
Joliet 

Albert  Day  &  Co.,  adv.  note 

$3. 

Joliet  City  Bank 
5c 


—31— 


Lockport 

Norton  &  Co. 

lOc 
H.   Norton 

12y2c,  25c,  50c 
Macomb 

Chandler  &  Co. 

5c 
Nauvoo 

Nauvoo   House   Ass'n    (Mormon 
issue) 

$50.,  $100. 
Ottawa 

Wm.  H.  W.  Cushman,  1862. 

lOc,  50c 
Peoria 

Farmers   &   Merchants   Ex.   Co. 

$3. 
Merchants  Association 

5c 
Peru 

Brewster  &  Co. 

5c 

Bank  of  Peru 
5c 


Quincy 

L.  &  C.  H.  Bull 

5c 
Eagle  Mill,  1862 

lOc 
Farmer's  &  Mei'chant's  Ex.  Co. 

$1. 
Quincy  Savings  Bank 

5c 
Rochelle 

Guest  &  Lake,  advertising  note 

AO 
$rf. 

Rockford 

Wood  &  Co.,  Druggists 

2c 
Springfield 

(See  State  issues) 
Trenton 

David  Beardsley  &  Co. 

5c 
Washington 

B.  P.  Kelly,  Nov.  1,  1862 
50c 


—32— 


A    000018398    8 


